• Weighed down by persistent USD weakness.
• Cautious environment lends additional support to the Swissy.
The USD/CHF pair extended overnight rejection slide from just ahead of the parity market and remained under some selling pressure through the mid-European session on Tuesday.
Currently trading around the 0.9945-40 region, the pair was being weighed down by persistent US Dollar selling bias and has now drifted back closer to over 2-week lows touched last week. Uncertainty over the progress of US tax reform legislation kept the USD bulls on the back-foot and has been one of the key factors weighing on the major.
The pair's downfall since the early European session could also be attributed to better-than-expected Swiss PPI print, showing an increase of 0.5% m-o-m for October as compared to 0.2% expected.
Meanwhile, the prevalent cautious sentiment around equity markets seems to have prompted some safe-haven demand and further underpinning the Swiss Franc, eventually exerting some additional downward pressure on the major.
Moving ahead, today's release of US PPI print would be looked upon for some short-term trading impetus. The key focus would be on Wednesday's important macro data, featuring the latest inflation figures and monthly retails sales data from the US, which might influence December Fed rate hike expectations and drive the pair in the near-term.
Technical levels to watch
Immediate support remains near the 0.9920 region, below which the pair is likely to break below the 0.9900 handle and head towards testing its next support near the 0.9865-60 horizontal zone.
On the upside, 0.9965 level now becomes immediate resistance, which if cleared should assist the pair to make a fresh attempt towards reclaiming the parity mark.
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